NICOSIA – The House of Representatives on Tuesday rejected a Government bill to impose a levy on all bank deposits saying the Eurogroup’s demand was predatory and illegal.Akel, Diko and Edek, the European Party, the Green and an independent produced a majority vote of 36 against with 19 abstentions. Ruling Disy abstained. The House met after several delays with hundreds of demonstrators protesting against the bailout outside.The rejection had been widely anticipated with the president himself saying he didn’t expect it to be approved. He has called all political leaders to a 9am meeting at the Palace.Banks remain closed until Thursday and are bracing for an anticipated run once they do open.The Finance Minister, Michalis Sarris is on his way to Moscow seeking Russia assistance to cover Cyprus’s and the banks’ financial requirements.Earlier on Tuesday the government amended the bill to exempt depositors under €20,000 but this failed to sway the house. The mood in the h House was very much against the Eurozone.Parties say they have alternative proposals to submit to the government.http://www.cyprusgasnews.com/archives/2158 .

Cypriot President Nicos Anastasiadis is holding consultations with Ministers and lawmakers about the terms of the 10bln-euro bailout offered by the European Union, the European Central Bank and the International Monetary Fund.

According to European papers, Cypriots and Cyprus-based expats are shocked over a demand to tax deposits in Cypriot banks. The EuroGroup believes this can annually raise up to 5.8bln euros for the Cypriot treasury.

Officials say many of the bank accounts have already been frozen.

EU hopes Russia will help prevent Cyprus from defaulting

The European Union hopes that Russia will take part in the effort to prevent Cyprus from defaulting by easing the terms of previous loans, rather than granting fresh loans. This came in a statement by the European Commissioner for Economic and Monetary Affairs, Olli Rehn, following a meeting of the European Group.

This will make it possible for Nicosia to release some extra funds to ensure financial stabilization, he said. Meanwhile, the Cypriot Finance Minister, Mikhalis Sarris, is due to arrive in Moscow on Wednesday to take up Russia’s additional aid to Cyprus.

It is held at the moment that Moscow may prolong the loan pay-off term for Nicosia. The 2.5 billion euro loan was granted in 2011 for five years. Moscow could also lower the current interest rate on the loan.

Russia ready to extend Cypriot loan, cut interest

Russia’s government is ready to ease the conditions of a 2.5 billion euro loan it made to Cyprus by extending the 5-year maturity beyond 2016 and by cutting the 4.5 percent interest, EU Economic and Monetary Affairs Commissioner Olli Rehn said.

“My understanding is that the Russian government is ready to make a contribution with an extension of the loan and a reduction of the interest rate,” Rehn said on Saturday.

Levy on Cypriot bank deposits to raise 5.8 bn: euro head

A “stability levy” that will hit all Cypriot bank depositors, resident and non-resident, is expected to raise 5.8 billion euros as part of a bailout deal agreed by the eurozone and the IMF early Saturday, the Eurogroup head said.

The chairman of the Eurogroup of finance ministers, Jeroen Dijsselbloem of the Netherlands, gave this figure under heavy questioning over the levy, which will see deposits of more than 100,000 euros ($130,000) in Cypriot banks hit with a 9.9 percent one-off tax, and even small savings losing 6.75 percent.

Eurozone agrees 10 bln euros bailout for Cyprus

Euro zone ministers struck a deal on Saturday to hand Cyprus a bailout worth 10 billion euros to stave off bankruptcy, in return for promises of tax rises from Nicosia.

After 10 hours of talks through the night, finance ministers from the currency bloc agreed to a package, smaller than initially expected, mainly needed to recapitalise the Mediterranean island’s banks which were hit hard by a sovereign debt restructuring in Greece last year.

The size of the loan has been cut from the originally planned 17 or 18 billion euros, which is about the size of Cyprus’s annual GDP.

“The Eurogroup was able to reach a political agreement with the Cypriot authorities on the cornerstones of this agreement,” Dutch Finance Minister Jeroen Dijsselbloem, who chairs the finance ministers’ group, told reporters.

“Financial assistance to Cyprus is warranted to safeguard financial stability to the island and to the euro zone as a whole.”

The anti-crisis aid to Cyprus comprises a one-off tax on bank deposits. A tax will, besides, be imposed on income from bank deposits. So, the end agreement ignores the resistance of Cyprus and provides for local bank depositors’ involvement in the programme of recovery of Cyprus’s financial system.

Central Bank chief calls for action on Cyprus

Central Bank Governor Panicos Demetriades has warned of a “systemic risk” that a lack of funding for Cyprus could pose to the entire eurozone.

In a Thursday interview with Reuters, Mr. Demetriades said a new wave of debt crisis was the biggest risk for the eurozone economy.

He said CB negotiations were still underway but urged EU partners to conclude Cyprus’ bailout this month, saying “periphery is the biggest risk, and at the minute it is Cyprus.”